Private International Law: Recognition and Enforcement of Foreign Judgment
Recognition and Enforcement of Foreign Judgment
Distinction between Recognition and Enforcement
In conflicts parlance, the term "foreign judgment" refers to all decisions rendered outside the forum and encompasses judgments, decrees, and orders of courts of foreign countries as well as those of sister states in a federal system of government.
If the successful plaintiff fails to obtain satisfaction of a judgment in the court which granted it, he may try to enforce it in another state where the defendant can be located.
Likewise, a case for recognition may arise if the defendant wins and asserts that decision to preclude the plaintiff from filing a suit on the same claim in another forum.
Although the rules on recognition and enforcement of foreign judgments are analogous, there are conceptual and procedural differences between the two.
Recognition is a passive act of giving effect to a judgment of Forum-1 without necessarily filing an action in Forum-2.
For example, a divorce decree issued in Italy to an Italian gives him capacity to remarry in the Philippines.
On the other hand, enforcement of a foreign judgment requires filing of an action in court.
An action of debt must be brought in Forum-2 on the Forum-1 judgment, and a new judgment by Forum-2 must be handed down before the plaintiff can have properties of the defendant attached.
Bases of Recognition and Enforcement of Foreign Judgment
The earliest American case on the recognition and enforcement of a foreign judgment was based on comity.
Cheshire, an eminent conflict-of-laws commentator, observed that the theory of comity "would appear to mean that, in order to obtain reciprocal treatment from the courts of other countries, we are compelled to take foreign judgments as they stand and to give them Full Faith and Credit."
One effect of recognition based on comity is that it calls for reciprocity between the concerned jurisdictions.
Hence, Forum-A would withhold recognition and enforcement of the prior judgment if it comes from Forum-B, a country which does not give the same concession to a judgment coming from Forum-A.
Recognition and enforcement of foreign judgments are based also on "the obligation of foreign judgments."
This doctrine of obligation is derived from the rigid and unyielding vested rights theory.
It considers a judgment of a foreign court of competent jurisdiction as imposing a duty or obligation on the losing litigant.
For example, if there is an adjudication on the debt owing to the plaintiff, Forum-2 treats the Forum-1 judgment as evidence of the debt which may be enforced in the Forum-2 by an action of debt.
Godard v. Gray (L.R. 6 Q.B. 139, 1870):
Plaintiffs (French citizens) sued defendants (English citizens) based on a charterparty, contract for the hire of a vessel, made in Sunderland, England.
The charterparty included a clause: "Penalty for non-performance of this agreement, estimated amount of freight."
French courts interpreted this clause as liquidated damages.
Lower court awarded damages equivalent to freight for two voyages.
Superior French court reduced the amount to freight for one voyage, reasoning that the clause fixed indemnity for contract non-performance.
English law, however, views such clauses as not limiting damages to the penalty amount but rather as a cap, subject to actual damages proven.
French courts were unaware of this interpretation under English law.
Whether an English court can enforce a foreign judgment (from France) based on an interpretation of English law that differs from its own.
Principle of Enforcing Foreign Judgments:
English courts enforce foreign judgments based on the principle of legal obligation, not comity or courtesy.
Such judgments are enforced under English common law, not by treaty or statute, but on the principle of legal obligation.
A judgment by a competent foreign court creates a legal obligation to pay the amount adjudicated.
Defenses to enforcement include:
Lack of jurisdiction of the foreign court.
Fraud in obtaining the judgment.
Willful disregard of English law rights.
Analysis of the Case:
The French courts acted judicially, honestly, and in good faith. There was no evidence of fraud or jurisdictional overreach.
The difference in interpreting the penalty clause did not negate the legal obligation imposed by the French judgment.
English courts do not examine foreign judgments for mistakes in legal interpretation unless they negate the legal obligation.
The French court's judgment was enforceable in England, as there was no valid defense negating the legal obligation or showing fraud or jurisdictional overreach.
Policies Underlying Recognition and Enforcement
Many courts recognize and enforce foreign judgments on the ground of res judicata.
Under this principle, those who have contested an issue shall be bound by the result of the contest and that matters once tried and decided with finality in one jurisdiction shall be considered settled as between the parties.
Parties are thus prevented from litigating issues that have been determined between them by a valid local judgment.
The principle recognized in Anglo-American jurisprudence is that foreign judgments, subject only to few exceptions, are not open to reexamination on the merits when placed in issue before local courts.
This principle seeks to accomplish a policy common to all states, which is to give finality to litigation.
Once a court has rendered judgment in a case, the issues which were therein litigated or which could have been litigated become binding on the parties and their privies after the time for appeal has expired or if they lose their appeal.
Public policy dictates diminishing the judicial energy invested in deciding individual suits, encouraging confidence in and deference to court decrees, and securing the legitimate expectation of the successful plaintiff or defendant that he will no longer be harassed into protecting his interests.
Thus, under Rule 39, Section 40 of the Revised Rules of Court in the Philippines, a judgment of a tribunal of a foreign country, having jurisdiction to pronounce the judgment renders it conclusive upon the title to the thing, while a judgment against a person is presumptive evidence of a right as between the parties and their successors in interest.
The need for finality of judgments is explained by American courts in terms other than res judicata, such as the related concepts of "merger" and "bar."
"Merger" considers the plaintiff's cause of action as merged in the judgment, and as a result, he may not relitigate that exact claim.
"Bar," on the other hand, refers to a situation where a "successful defendant interposes the judgment in his favor to avert a second action by the plaintiff on the same claim."
By virtue of direct estoppel, the relitigation of all matters decided is precluded.
In addition to this, the doctrine of collateral estoppel renders conclusive all "essential issues of fact actually litigated in the suit decided on by the foreign court."
Whereas res judicata seeks to end litigation by disallowing a suit on the same claim, collateral estoppel is concerned with issue preclusion by barring relitigation of an issue already litigated on in a prior proceeding.
Requisites for Recognition or Enforcement
The foreign judgment was rendered by a judicial or a quasi-judicial tribunal which had jurisdiction over the parties and the case in the proper judicial proceedings.
A court validly asserts jurisdiction in proceedings in personam based on the consent of the parties or the relation of the parties or events to the forum, thereby satisfying the minimum standards of fair play and substantial justice.
In in rem proceedings, jurisdiction is anchored on the power of the state over the property found within the territory.
When there is an egregious disregard for due process, the foreign judgment will be denied recognition and enforcement.
The judgment must be valid under the laws of the court that rendered it.
In Pemberto v. Hughes, 1 Ch (1899) 781, the summons served on Mrs. Pemberto in Florida, gave her only nine days, instead of the statutory ten, to make her appearance. Pemberto asserted that the decree was invalid and not entitled to recognition. However, the court held that since "no substantial justice, according to English nations, is offended, all that English Court looks to is the finality of the judgment and the jurisdiction of the Court ... namely, its competence to entertain the sort of case which it did deal with, and its competence to require the defendant to appear before it." Since the Florida Court was competent and no substantial injustice was committed, the English court did not consider the error in procedure to significantly alter an otherwise valid decree.
The judgment must be final and executory to constitute res judicata in another action.
If the judgment is interlocutory or provisional in character, which "contemplates that a fuller investigation leading to a final decision may later be held, it creates no obligation" on the forum court to recognize or enforce it.
The state where the foreign judgment was obtained allows recognition or enforcement of Philippine judgments.
This principle is a reiteration of international comity as a basis for recognition and enforcement of a foreign-state or foreign-country decree.
Decided by the U.S. Supreme Court in 1895, the dictum in Hilton v. Guyot, declaring the French judgment not conclusive of its merits, was based "upon the broad ground that international law is founded upon mutuality and reciprocity and that by the principles of international law recognized in most civilized nations, and by the comity of our own country, which it is our judicial duty to know and to declare, the judgment is not entitled to be considered conclusive."
The court's non-recognition of the French judgment was due to a French law which allowed review of American judgments on the merits. Instead of being a mutual exchange of privileges, comity was used as a means of retaliation. Consequently, the judgment in favor of the French plaintiff was not satisfied in order to coerce the French legal system to change its law. Both academics and courts have been critical of this ruling because, in effect, the court in Hilton discriminated against the litigants on account of the policies of their governments which they were in no position to shape or alter.
Furthermore, one can argue that the task of formulating policies through reciprocity is a power misplaced in the judiciary and should be appropriately wielded by the other branches of government.
Professors Trautman and von Mehren succinctly point out the difficulties with the reciprocity requirement. First, its normal tendency is to lower, rather than raise the standards of practice. Hence, it does not have a constructive effect. Second, the private litigants burdened may not be closely attached to the legal order sought to be changed. Third, the administration of reciprocity clauses can be complicated especially where case-law systems are affected since finding the exact foreign law that grants reciprocity is, in itself, still nebulous. It remains unclear whether the existence of reciprocity is sufficiently proved by a general recognition of such or requires a specific recognition for a case identical or analogous to the one before the court.
The judgment must be for a fixed sum of money.
Unless the foreign judgment specifies performance or delivery, there is nothing for the forum court to enforce.
In the case of Sadler v. Roberis, the English court held that until taxation, the plaintiff could not enforce his claim there because the Jamaican court decided that from the sum of £3,670 due him, should first be subtracted the costs incurred by the defendant, which was to be taxed. Hence, the amount decreed was not fixed.
Had the plaintiff been able to show proof of the law on taxation to determine the balance after the applicable taxes were subtracted, could the English court then have considered the amount certain since it could now be verified by a simple mathematical procedure?
The foreign judgment must not be contrary to the public policy or the good morals of the country where it is to be enforced.
The public policy exception traces its inception to Joseph Story's comments on comity as a choice-of-law mechanism. He wrote that the forum was not under any duty to apply foreign law (or recognize foreign judgments) when such was repugnant to its internal policies or prejudicial to its interests.
The then prevailing choice-of-law method was the inflexible vested rights theory, which often gave rise to absurd and unjust judicial decisions; a problem the public policy exception sought to avoid.
Frequent recourse to this exception in order to nullify a foreign judgment has been assailed for its lack of analytical accuracy and inability to arrive at objective standards.
The judgment must not have been obtained by fraud, collusion, mistake of fact, or mistake of law.
Whether or not there was fraud is decided by the court where enforcement of the foreign judgment is sought on the basis of its own internal law.
A conflicts problem may arise because this internal law may not be in agreement with notions of equity held by the foreign state.
To impeach a prior judgment, fraud here must be an "extrinsic, collateral act which vitiates the most solemn proceedings of the courts of justice" such as collusion by the parties, suppression of an important document, or the presentation in evidence of a forged will or falsified affidavit.
Northwest Orient Airlines, Inc. vs. Court of Appeals, G.R. No. 112573, Feb 9, 1995
In 1974, Northwest Orient Airlines (Northwest) and C.F. Sharp & Co. (Sharp) entered into an agreement where Sharp was authorized to sell Northwest's airline tickets.
Sharp failed to remit the proceeds from ticket sales, leading Northwest to sue in Tokyo for the unremitted amount and damages.
The Tokyo District Court issued summons against Sharp in Japan, but service failed twice, so it was served at Sharp's Manila office.
Sharp accepted the writ but did not appear in court.
The Japanese court rendered a judgment in favor of Northwest for ¥83,158,195 plus damages.
Sharp did not appeal, and the judgment became final.
Northwest attempted to enforce the Japanese judgment in the Philippines.
Sharp contested it, claiming that the judgment was invalid due to improper service and lack of jurisdiction.
Whether the Japanese court's judgment is enforceable in the Philippines, given Sharp's claim that the service of summons was invalid and the court lacked jurisdiction over it.
Foreign judgment valid.
A foreign judgment is presumed valid and binding, and the burden of proving its invalidity lies with the party challenging it.
Sharp failed to present evidence proving that the extraterritorial service of summons was invalid under Japanese law.
Processual Presumption.
The Court applied the "processual presumption," assuming that Japanese law on service of summons was similar to Philippine law, which allows service on a foreign corporation doing business in the Philippines.
The service of summons by the Tokyo District Court at Sharp's Manila office was deemed valid under Philippine law and international processual norms.
Residency of Corporation
A corporation's residency is determined by its place of incorporation. However, a foreign corporation doing business in another country may be deemed a resident for jurisdictional purposes.
SHARP's business operations in Japan made it amenable to the jurisdiction of Japanese courts.
The Court reversed the decision of the Court of Appeals and ordered Sharp to pay the amount adjudicated in the Japanese judgment, with interest, but denied claims for attorney's fees, litigation expenses, and exemplary damages.
Grounds for Non-Recognition
Section 4 of the Uniform Money-Judgment Recognition Act of the U.S. reads:
A foreign judgment is not conclusive if:
the judgment was rendered under a system which does not provide impartial tribunals or procedures compatible with the requirements of due process of law;
the foreign court did not have personal jurisdiction over the defendant; or
the foreign court did not have jurisdiction over the subject matter.
A foreign judgment need not be recognized if:
the defendant in the proceedings in the foreign court did not receive notice of the proceedings in sufficient time to enable him to defend;
the judgment was obtained by fraud;
the cause of action or claim for relief on which the judgment is based is repugnant to the public policy of this state;
the foreign judgment conflicts with another final and conclusive judgment;
the proceeding in the foreign country was contrary to an agreement between the parties under which the dispute in question settled otherwise than the proceeding in that court; or
in the case of jurisdiction based only on personal service, the foreign court was a seriously inconvenient forum for the trial of the action.
The first three grounds are mandatory and the last three discretionary.
Effect of Foreign Judgments
Foreign judgments are recognized and allowed to be enforced in our jurisdiction as a matter of comity with the international community.
We give full faith and credit to judgments issued by foreign courts so long as these judgments are not contrary to public policy or our prohibitive laws.
Thus, a foreign judgment awarding the custody of a child below seven years old to the father may not be enforced in Philippine courts since it is our policy to award automatic custody to the mother of the child who is below seven years old.
Likewise, a divorce decree issued by a foreign court involving Philippine nationals is not recognized in our country since divorce is against our public policy and Philippine nationals are governed by Philippine laws.
The enforcement of foreign judgments is governed by Section 48 of Rule 39 of the Rules of Court. In essence, Section 48 states:
SEC. 48. Effect of foreign judgments or final orders.
The effect of a judgment or final order of a tribunal of a foreign country, having jurisdiction to render the judgment or final order is as follows:
(a) In case of a judgment or final order upon a specific thing, the judgment or final order is conclusive upon the title to the thing, and
(b) In case of a judgment or final order against a person, the judgment or final order is presumptive evidence of a right as between the parties and their successors in interest by a subsequent title.
In either case, the judgment or final order may be repelled by evidence of a want of jurisdiction, want of notice to the party, collusion, fraud, or clear mistake of law or fact.
Under Section 48:
If the judgment is upon a specific thing, the judgment is conclusive upon the title to the thing.
If the judgment is against a person, the judgment is presumptive evidence of a right as between the parties.
Hence, if the judgment concerns the ownership of real or personal property, that judgment binds the title to the real or personal property.
On the other hand, if a foreign court orders a person to pay a specific sum or to perform an act, the same binds the respondent party to perform or satisfy the judgment of the foreign court, unless he presents proof to repel the foreign judgment.
Res Judicata Effect of Foreign Judgment
Although issued in another jurisdiction, the decision of a foreign court has the effect of res judicata in our jurisdiction.
Thus, foreign decisions are afforded conclusiveness of judgment in our jurisdiction as if they were also a decision rendered by local courts.
Generally, a foreign judgment is entitled to respect and recognition by our courts.
The only duty of our courts is to ensure that the judgment is genuine, authentic, and in accordance with foreign law.
If those conditions are complied with, the court's remaining duty is to enforce the foreign judgment.
Under no circumstance are local courts authorized to reopen the case and relitigate the issues under our procedures.
Local courts may not review the correctness or appropriateness of the foreign court's decision so long as they do not violate public policy or prohibitive laws.
Fujiki v. Marinay, G.R. No. 196049 (June 26, 2013)
Minoru Fujiki, a Japanese national, married Maria Paz Galela Marinay, a Philippine national, on January 23, 2004. They later separated.
Marinay married another Japanese national, Shinichi Maekara, on May 15, 2008, but suffered physical abuse from him.
Marinay re-established her relationship with Fujiki and obtained a Japanese court judgment declaring her marriage to Maekara void due to bigamy.
Fujiki filed a petition with the RTC for the recognition of the Japanese court’s judgment annulling Marinay and Maekara’s marriage.
RTC: Dismissed the petition, stating that under A.M. No. 02-11-10-SC, only the husband or wife of the void marriage could file such petitions. Fujiki appealed to the Supreme Court.
Whether the Rule on Declaration of Absolute Nullity of Void Marriages (A.M. No. 02-11-10-SC) applies to foreign judgments of nullity. No.
Philippine courts only need to recognize a foreign judgment as a fact, under the Rules of Court.
Applying A.M. No. 02-11-10-SC would require the relitigation of the foreign judgment as if it were a new petition for nullity in the Philippines, which defeats the purpose of recognizing foreign judgments.
Philippine courts cannot substitute their judgment on the status and capacity of foreign citizens under foreign laws.
Section 48(b), Rule 39 of the Rules of Court limits the review of foreign judgments to extrinsic grounds like lack of jurisdiction, lack of notice, collusion, fraud, or clear mistakes of law or fact.
Courts cannot delve into the merits of the foreign judgment.
Whether a foreign decree of absolute nullity of marriage is against Philippine public policy. No.
The Japanese Family Court's judgment nullifying the bigamous marriage is consistent with Philippine public policy, as bigamy is void under Article 35(4) of the Family Code and is a crime under Article 349 of the Revised Penal Code.
While the Philippines does not recognize divorce, the recognition of a foreign judgment nullifying a bigamous marriage does not violate public policy.
Philippine courts have jurisdiction to recognize a foreign judgment nullifying a bigamous marriage without the need for a full trial or relitigation.
The recognition of foreign judgments in the Philippines is limited to ensuring that they are not inconsistent with public policy and are free from extrinsic grounds for rejection (e.g., fraud or lack of jurisdiction).
Recognized foreign judgments serve as presumptive evidence of rights under Section 48(b), Rule 39.
Once recognized, they can be the basis for the correction of civil registry entries to reflect new statuses and avoid inconsistencies in public records.
When Foreign Judgment May Be Repelled
The general rule is that foreign judgments are entitled to respect and recognition in our jurisdiction and that local courts have no authority to review and relitigate the issues in the decision.
However, there are instances when local courts are authorized to set aside the foreign judgment and reopen the issues decided by a foreign court.
Section 48 of Rule 39 of the Rules of Court enumerates:
want of jurisdiction
want of notice to the party
collusion
fraud
clear mistake of law or fact
as bases for repelling a foreign judgment.
Hence, if a party was not afforded an opportunity to be heard by the foreign court, a local court is justified in reopening the case to litigate a contentious issue in the foreign judgment.
Too often, this lack of opportunity to be heard can arise from the deprivation of the right of counsel to a party to the case. (See Roehr v. Rodriguez, 404 SCRA 495 [2003]; Tropic Leisure Corp. v. Hailey, 796 SE 2d 129 [2017]).
Local courts must ensure that parties were properly notified of complaints filed against them to afford them an opportunity to answer.
Also, if the foreign judgment is so unjust and unfair that it will not stand up to the test of fundamental fairness and justice, local courts are justified in not recognizing the foreign judgment.
For example, convictions in foreign jurisdictions based purely on religious grounds like offending religious feelings may not stand up to Western standards of free speech.
Also, those convictions based on laws violative of substantive due process may be refused recognition by local courts.
For example, some foreign jurisdictions prohibit women from operating motor vehicles and penalize them criminally for violations thereof.
Western countries also frown upon the practice of some jurisdictions that automatically award custody to the mother of minor children based mainly on the fact that mothers are kinder and more loving than fathers. Indeed, this is gender-based discrimination.
In these instances, the foreign laws suffer from a fundamental lack of reason which may then be used as a ground for setting aside foreign judgments or convictions.
Roehr v. Rodriguez 404 SCRA 495 (2003)
In 1980, Wolfgang Roehr, a German citizen, married Carmen Rodriguez, a Filipino citizen, in Germany.
In 1996,Carmen filed a petition for the nullity of their marriage in the Makati RTC.
In 1997, Wolfgang obtained a divorce decree from a German court, which included custody of their two children.
He filed a motion to dismiss the RTC case due to the divorce decree. The RTC initially granted the motion.
Carmen sought reconsideration to continue the case for custody and property distribution, which the RTC allowed.
Wolfgang appealed to the Supreme Court.
Whether the RTC can reopen the case to address the issues of custody and asset distribution despite the divorce decree. Yes.
Recognition of Foreign Divorce:
The divorce decree from Germany was not contested and was recognized as valid, granting Carmen the capacity to remarry.
However, the divorce decree's legal effects on custody and property distribution require determination by Philippine courts.
Custody and Legal Effects:
While foreign divorce decrees are recognized, their effects, such as custody and support, must be adjudicated locally.
Philippine courts must assess whether due process was observed in the foreign proceedings.
Foreign judgments in actions in personam (e.g., custody) are considered prima facie evidence and can be challenged.
In this case, Carmen was not given a fair opportunity to participate in the German court proceedings. She had no counsel and did not comment on or participate in the divorce hearings.
Children's Best Interests:
The RTC was correct to reopen the case to determine custody, support, and education in the children’s best interests.
The Child and Youth Welfare Code prioritizes the welfare of children in all custody-related matters.
The German divorce decree was based on procedural grounds (three years of separation) and did not establish the offending spouse or Carmen's fitness as a parent.
Philippine courts are justified in setting the custody issue for hearing since the German decree did not comprehensively address this matter.
St. Aviation Services v. Grand International Airways, G.R. No. 140288 (October 23, 2006)
St. Aviation Services entered into two maintenance agreements with Grand International Airways for aircraft maintenance.
Respondent failed to pay $452,560.18 for services rendered.
Petitioner filed a collection suit in the High Court of Singapore.
The Singapore court issued a Writ of Summons, served extraterritorially to respondent in Pasay City, Philippines, by the local sheriff.
Respondent did not respond to the summons, leading to a judgment by default in Singapore.
Petitioner sought enforcement of the judgment in the Pasay City RTC.
Respondent argued the Singapore court lacked jurisdiction over its person and that its right to due process was violated.
RTC: Denied the motion to dismiss.
CA: Reversed the decision due to lack of jurisdiction.
Whether the Singapore High Court acquired jurisdiction over the person of the respondent through the service of summons in the Philippines.YES
Whether the Singapore judgment by default is enforceable in the Philippines. YES
Jurisdiction by Service of Summons:
Jurisdiction over a party is governed by the lex fori (law of the forum), in this case, Singapore law.
The Singapore High Court authorized extraterritorial service of the Writ of Summons in accordance with its Order 11, Rule 4(2) of the Rules of Court 1996, which allows service through methods authorized by the law of the country where the defendant is located.
In the Philippines, jurisdiction is acquired through proper service of summons, either personally or by substituted service.
Here, the sheriff served the summons at respondent's office in Pasay City to the secretary of the General Manager, in compliance with Philippine procedural rules.
Enforceability of the Foreign Judgment:
The service of the Writ of Summons complied with both Singaporean and Philippine procedural laws, thereby granting the Singapore High Court jurisdiction over the respondent.
Since the Singapore court followed proper procedure and issued a valid default judgment, the judgment is enforceable in the Philippines.
The respondent’s failure to respond to the summons constitutes neglect, not a denial of due process.
Tropic Leisure Corp. v. Hailey, 796 S.E.2d 129 (2017)
Tropic Leisure Corp. and Magens Point, Inc., both based in the U.S. Virgin Islands, obtained a default judgment against Jerry A. Hailey, a resident of North Carolina, for $5,764.00 in the small claims division of the Virgin Islands Superior Court.
Hailey did not appeal the judgment in the Virgin Islands.
Tropic Leisure filed a Notice of Filing Foreign Judgment and a motion to enforce it in Wake County District Court, North Carolina.
Hailey sought relief, arguing the Virgin Islands' judgment violated his constitutional rights and North Carolina public policy, as it denied him due process by prohibiting legal representation or a jury trial in small claims proceedings.
The district court denied Hailey’s motion for relief. He appealed the decision to the North Carolina Court of Appeals.
Whether the default judgment of the Virgin Islands Superior Court's small claims division is enforceable in North Carolina under the Full Faith and Credit Clause. No, the judgment is not enforceable.
Full Faith and Credit Clause and UEFJA:
The Full Faith and Credit Clause requires that a judgment rendered in one state be given the same effect in another state, provided it complies with constitutional due process.
Under North Carolina's Uniform Enforcement of Foreign Judgments Act (UEFJA), enforcement may be challenged on specific grounds, including violations of due process rights.
Virgin Islands Small Claims Procedures:
The Virgin Islands small claims division prohibits litigants from being represented by counsel or having a jury trial during the fact-finding phase.
Appeals are limited to the Appellate Division, which does not allow the introduction of new evidence.
This structure denies litigants the opportunity for meaningful representation during the fact-finding stage.
Due Process Violation:
A fundamental element of due process is the right to be heard meaningfully.
Courts in other jurisdictions have upheld small claims court procedures where litigants are initially denied counsel but later afforded a trial de novo with representation.
The Virgin Islands' framework fails this standard, as it entirely denies litigants the opportunity to be represented by counsel during any fact-finding phase.
This deprivation renders the judgment procedurally invalid and unconstitutional.
Enforcement Denied:
The lack of representation in the critical fact-finding phase of litigation violated Hailey's constitutional right to due process. As a result, the judgment is not entitled to full faith and credit in North Carolina.
Wrong Interpretation of Law
A foreign judgment may also be repelled if the foreign court that rendered it made a wrong interpretation of law.
The foreign court must have made an interpretation that is so repugnant to a treaty interpretation resulting in injustice or an unjust application of law.
It may be that a foreign court makes a judgment that palpably has no bases in law or jurisprudence or makes an interpretation to favor a party in a pending case.
This usually happens where a party to a case is a national of the country where the court sits.
This approach, however, is fraught with danger especially when two foreign courts are involved, and they are adjudicating a case where their nationals are the parties to a case.
Guimaraes v. Brann (583 S.W.3d 652, Tex. App. 2018)
In 2012, Marcelle Guimaraes filed for divorce from Christopher Brann in Texas.
Both parties agreed Guimaraes could travel to Brazil with their child, N.S.B., from July 2–20, 2013, under a Rule 11 Agreement.
However, Guimaraes did not return with the child and initiated custody proceedings in Brazil.
Harris County Court Orders:
Brann obtained orders granting him sole physical custody of the child and restricting Guimaraes' access.
Brann sought the return of the child through a Hague Convention petition in Brazil.
Brazilian Courts:
Initially denied Brann’s petition but later recognized the wrongful retention under the Hague Convention.
However, it ultimately refused to return the child, citing:
Evidence of domestic violence and Brann’s issues with addiction.
Risks of physical and psychological harm to the child if returned to the U.S.
The child’s integration into his new environment in Brazil.
Brazilian courts ruled against returning the child.
Texas Courts:
Denied Guimaraes’ motion to dismiss for lack of jurisdiction.
Issued a final decree granting Brann the right to designate the child’s primary residence in the U.S. and awarding damages to Brann.
Texas courts maintained jurisdiction and awarded Brann custody in the divorce decree.
Whether the Texas court abused its discretion by refusing to extend comity to the Brazilian courts' resolution of the Hague Convention Petition. No.
Principles of Comity
Courts begin with an inclination to defer to foreign courts' decisions under the Hague Convention.
Comity may be denied if the foreign court:
Misinterprets the Hague Convention.
Contravenes its fundamental premises or objectives.
Fails to meet a minimum standard of reasonableness.
U.S. Jurisdiction Despite Foreign Rulings
U.S. courts retain jurisdiction over custody even when a co-signatory of the Hague Convention refuses the child's return.
The foreign court's ruling must be reviewed for compliance with the Hague Convention's principles.
Well-Settled Exception (Article 12 of the Hague Convention)
General Rule: Return is mandatory if proceedings begin within one year of the child's removal.
Exception: The court may refuse return if:
The proceedings started after one year.
The child is settled in a new environment.
Misapplication by Brazilian Court:
Applied the well-settled exception even though Brann filed within one year.
Justified this by prioritizing the child's best interest over the Convention's language.
Misinterpretation warranted denial of comity.
Grave-Risk Exception (Article 13[b])
Standard: Must show a "grave risk" of harm to the child if returned.
Improper Application by Brazilian Court: Based on subjective assessments of the child’s best interest (e.g., living with the mother rather than a babysitter).
Contravened the Hague Convention’s intention to avoid relitigation of best-interest determinations.
Full Faith and Credit (ICARA, Section 9003(g))
Guimaraes argued that the Brazilian Hague Order required full faith and credit in U.S. courts.
Full faith and credit does not apply to decisions violating the Hague Convention’s standards.
Res Judicata
Guimaraes claimed Brann was barred from relitigating issues already resolved in Brazilian courts.
The issue was not res judicata but whether to extend comity to the Brazilian judgment.
The court retained jurisdiction.
Local Courts Not a Refuge for Failed Business Dealings
It is an accepted practice in the Philippines that where a foreign judgment, convention, or agreement contravenes the state's public policy or prohibitive laws, said foreign judgments or convictions are void and cannot be enforced in our jurisdiction.
Hence, in labor cases, where Filipino laborers are prejudiced by foreign laws or agreements, the same may not be enforced by our local courts.
However, this rule does not mean that local courts are refuges for failed business dealings or transactions gone awry in foreign jurisdictions where the underlying agreement is both valid in the Philippines and in the foreign jurisdiction.
So long as a party was properly given an opportunity to be heard by a foreign court, the latter's judgment may appropriately be enforced in our jurisdiction.
Also, the acts of a party freely and voluntarily undertaken in a foreign jurisdiction will have the same effect as estoppel in our jurisdiction. That party cannot be heard to deny its actuations and admissions made in foreign jurisdictions.
Local courts are not a venue for sour-graping individuals or entities who failed to comply with their undertakings in other jurisdictions.
As a member of the international community, the Philippines accords reciprocity and comity to decisions of foreign tribunals, save only when these violate public policy or a prohibitive law of the Philippines.
Philippine Aluminum Wheels, Inc. v. FASGI Enterprises G.R. No. 137378, October 12, 2000
FASGI Enterprises, Inc. (FASGI), a California corporation, entered into an agreement with Philippine Aluminum Wheels, Inc. (PAWI), a Philippine corporation, and Fratelli Pedrini Sarezzo S.P.A. (FPS), an Italian corporation, for the importation and distribution of aluminum wheels in the U.S.
FASGI paid $216,444.30 for the shipment of 8,594 wheels from PAWI but later discovered defects in some items.
FASGI sued PAWI and FPS in a U.S. court for breach of contract and damages.
A settlement agreement was reached but later violated by PAWI.
A second settlement agreement was entered into, but PAWI again failed to comply.
The U.S. court rendered a final judgment in favor of FASGI.
FASGI sought enforcement of the foreign judgment in the Philippines through the RTC of Makati City.
RTC: Dismissed the petition citing fraud, collusion, and unjust enrichment.
CA: Reversed the RTC decision.
Whether the decision of the California court may be enforced in the Philippines. YES.
Validity of Foreign Judgments
A valid foreign judgment is enforceable in the Philippines if the parties had a fair hearing before a competent court, conducted regular proceedings, and the judgment was not tainted with fraud or prejudice.
Foreign judgments are presumed valid unless proven otherwise.
Authority of Counsel
PAWI claimed its counsel, Mr. Thomas Ready, lacked authority to enter into the settlement.
However, PAWI failed to promptly repudiate the settlement and even confirmed the agreement in subsequent communications.
A party aware of a compromise agreement must promptly repudiate it if unauthorized.
PAWI did not repudiate the agreement promptly and continued to acknowledge its terms.
Benefit from Settlement
PAWI benefited from the settlement, avoiding substantial damages and litigation costs.
It cannot later disown the agreement when it proves unfavorable.
International Comity
The Philippine courts respect the finality of foreign judgments unless they violate public policy or law.
PAWI should have raised its objections in the California court.
Courts do not shield parties from unwise business decisions or unfavorable contracts freely entered into.
The settlement represented the conclusion of a failed venture.
Proof of Foreign Law
It must be borne in mind that local courts do not take judicial notice of foreign judgments and laws.
For a foreign judgment to be enforceable in our jurisdiction, the foreign judgment itself must be properly proved before our courts.
A party invoking a foreign law or foreign judgment as a source of right has to show in the first place the authenticity and genuineness of the foreign document and foreign law he is relying upon.
Without proper proof, processual presumption sets in, and Philippine laws shall govern as if the foreign law itself was Philippine law.
Sections 24 of Rule 132 of the 2019 Proposed Amendments to the Revised Rules on Evidence ("2019 Revised Rules on Evidence") prescribes the rule governing proof of foreign law.
Section 24 states:
Sec. 24. Proof of official record.
The record of public documents referred to in paragraph (a) of Section 19, when admissible for any purpose, may be evidenced by an official publication thereof or by a copy attested by the officer having the legal custody of the record, or by his deputy, and accompanied, if the record is not kept in the Philippines, with a certificate that such officer has the custody.
If the office in which the record is kept is in a foreign country, which is a contracting party to a treaty or convention to which the Philippines is also a party, or considered a public document under such treaty or convention pursuant to paragraph (c) of Section 19 hereof, the certificate or its equivalent shall be in the form prescribed by such treaty or convention subject to reciprocity granted to public documents originating from the Philippines.
For documents originating from a foreign country which is not a contracting party to a treaty or convention referred to in the next preceding sentence, the certificate may be made by a secretary of the embassy or legation, consul general, consul, vice consul, or consular agent or by any officer in the foreign service of the Philippines stationed in the foreign country in which the record is kept, and authenticated by the seal of his office.
A document that is accompanied by a certificate or its equivalent may be presented in evidence without further proof, the certificate or its equivalent being prima facie evidence of the due execution and genuineness of the document involved. The certificate shall not be required when a treaty or convention between a foreign country and the Philippines has abolished the requirement, or has exempted the document itself from this formality.
Thus, foreign laws and public documents may be proved by either:
Official publication; or
Copy of the public document attested by the officer having the legal custody of the record.
If the record is kept overseas, the copy must include an attestation by the officer having legal custody that states "that the copy is a correct copy of the original, or a specific part thereof, as the case may be."
The attestation must be under the seal of the office of the attesting officer.
An Apostille may then be appended to the copy of the public document if the document comes from a country which is a signatory to the Apostille Convention.
If a non-member, the documents must be authenticated before the Philippine embassy or consulate.
The Apostille Convention
On October 5, 1961, several states concluded and ratified the Convention Abolishing the Requirement of Legalization for Foreign Documents. Otherwise known as the Apostille Convention, the Philippines ratified it on September 12, 2018, and it entered into force in our country on May 14, 2019.
Article 2 of the Convention states:
Each Contracting State shall exempt from legalisation documents to which the present Convention applies and which have to be produced in its territory. For the purposes of the present Convention, legalisation means only the formality by which the diplomatic or consular agents of the country in which the document has to be produced certify the authenticity of the signature, the capacity in which the person signing the document has acted and, where appropriate, the identity of the seal or stamp which it bears.
The practical effect of the Apostille Convention is that it eliminates the need for legalization of documents to be used abroad. In the same manner, documents originating from another Apostille country do not need to be authenticated anymore with Philippine consulates before the documents could be used here in the Philippines. An Apostille certificate need only to be attached, and the public document may then be used in the Philippines.
In a public advisory dated May 7, 2019, the Department of Foreign Affairs advised the public that it will no longer issue Authentication Certificates and that it will just "affix an Apostille to documents for use abroad as proof of authentication for use in Apostille-contracting parties."
The Apostille dispenses the "need for authentication (legalization) by the concerned Foreign Embassies or Consulates General if the country or territory of destination of the authenticated document is already a member of the Apostille Convention."
In addition, public documents executed in Apostille-contracting countries (except Austria, Finland, Germany, and Greece) to be used in the Philippines no longer have to be authenticated by the Philippine Embassy or Consulate General once Apostillized by the foreign country.
However, for non-Apostille countries, there is still a need for authentication by the Philippine Embassy/Consulate General or by the concerned Foreign Embassies/Consulates General depending on where the documents will be used.
Apostille Certificates have made the process of authenticating documents before they can be used in a foreign jurisdiction simpler and cheaper, with fees pegged at:
₱100 per document for regular processing and
₱200 per document for expedited processing.